SHORT TERM: gap up opening rally, DOW +294
Overnight the Asian markets ended mixed. Europe opened lower but gained 0.5%. US index futures were higher overnight, and at 8:30 weekly jobless claims were reported lower and import prices were unchanged. The market opened at SPX 2657, then rallied to 2671 by 10:30. The SPX had closed at 2642 yesterday. After a pullback to SPX 2661 by noon, the market rallied to 2672 by 1pm. Then after a pullback to SPX 2656 the market rallied to 2675, before ending the day at 2664.
For the day the SPX/DOW gained 1.00%, and the NDX/NAZ gained 1.05%. Bonds lost 12 ticks, Crude rose 30 cents, Gold dropped $15, and the USD was higher. Medium term support is back to the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Tomorrow: consumer sentiment at 10am.
Thus far this week there have been gap openings everyday: three up and one down. The SPX, despite all the choppy activity, is up over 2% on the week. Yet, all it feels like is a lot of choppy activity leading to nowhere fast. Nevertheless, we continue to count the short term waves with a slight positive bias. We have potentially: Minor waves 1 and 2 (2672 and 2586), then Minute waves i (leading diagonal) and ii (2665 and 2639). Minute iii should be underway from yesterday’s low. From yesterday’s low we have two waves: 2672 and 2656 degree unknown at this point. The potential remains for the bull market to resume at any time despite the seemingly endless choppy activity. Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum ended the day above neutral. Best to your trading!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: uptrend